Preview: iMedia Connection: Autos
iMedia Connection: Autos
Anticipating consumer desire with your site search
Many industries are filled with complicated terms that are hard for people outside the field to understand, and the automotive industry may take the cake when it comes to this. It is notorious for jargon that confuses and frustrates many consumers.
Traditional online vehicle search functions only amplify this problem. The usual year, make, model, and style search forces consumers to wade through confusing names and may inadvertently eliminate many good vehicle choices. In addition, these types of searches do not allow retailers to gather valuable market intelligence regarding consumer preferences, which can help in targeted marketing. In short, traditional searches are about the vehicle, not the consumer, and are therefore stumbling blocks for many shoppers.
In the early 2000s, some automotive websites began implementing "lifestyle" searches. Named because they often depend on consumers answering a list of lifestyle questions -- questions that sought to categorize people as "sporty," or "career focused," or "family focused," for example -- these searches exposed consumers to a broader range of vehicles, but also forced them to pigeonhole themselves as a particular type of person. In addition, lifestyle searches still operate by focusing on the vehicle -- segmenting vehicle options by attributes like doors and engine size -- instead of on consumer needs.
It's time to go one step further and implement needs-based searches. These searches focus on the needs of the consumer, not on the vehicle. They are personalized and go beyond vehicle-centric options like engine size to what a consumer needs out of a vehicle. They allow consumers to search based on a number of different factors like gas mileage, available headroom, or off-road capability.
And now is the best time to implement this type of navigation. A recent independent study, commissioned by Chrome, revealed that a majority of consumers who bought or leased vehicles in the past 12 months changed vehicles because of their needs. Of particular note, 23 percent wanted better gas mileage, 8 percent needed more seating capacity, 7 percent didn't need as much capacity, 6 percent wanted more leg or headroom, and 4 percent wanted a vehicle with off-road or towing capacity. With traditional year, make, model and style searches, there is no way to help consumers find vehicles that match these needs quickly and easily.
The benefits of implementing needs-based searchesEducate consumersNeeds-based searches can expose consumers to a broad range of vehicles that may have never been on their radar. Allowing consumers to search by gas mileage, for example, may help them discover many vehicles they had not considered. Alternatively, they may learn that a vehicle they had their eyes on is not the best choice when fuel economy is a deciding factor.
Sell more new and used vehiclesNeeds-based searches can also help you sell more new and used vehicles. With new vehicles, this type of search helps consumers understand which vehicle choices are available and showcases inventory that may not have previously made the consumer's short-list.
For used vehicles, this type of search helps consumers navigate what, by definition, is a limited supply, since they can only choose from what is on the market or on a preferred dealer's lot. By helping them focus in on what is really important in a vehicle, the consumer can better locate a range of vehicles that fit their needs.
Gain market insightNeeds-based searches provide the opportunity to capture valuable demographic information and information about consumers' needs. Tracking user patterns can indicate the types of vehicles that consumers are searching for and help drive stocking or ordering decisions. This information can also be used to build a better customer profile, which allows for a better consumer experience.
Enable regional-based searchingA consumer in Florida may need cooled seats, while a consumer in North Dakota may need heated seats. Needs-based searches enable this type of specificity for a competitive a[...]
How to rescue the flailing auto sector
TNS Media Group's CEO Dean DeBiase shared some fresh research with iMedia's Driving Interactive audience that addresses the particularly challenging road ahead for auto marketers, and where the positive signs lie.
Right out of the gate, DeBiase said it was difficult not to focus on the troubling economic news of the day, but he summed it up by urging the industry to match its product plans and strategies with what consumers are going to want over the next few years.
"There's a lot of pent-up demand out there, so you can trigger certain things in consumers and get them to buy," he said. "Personally, I think the automotive industry supports a lot of sports and venues throughout this country, so for this to go away would be especially damaging."
TNS is comprised of four core business units: Compete, which monitors all online behavior; Cymphony, which monitors social media; Media Research, which monitors set-top box behavior; and Media Intelligence, which monitors all sides of advertising.
DeBiase is convinced that interactive ads on set-top boxes will be the next frontier of advertising, and he presented some data later on in his presentation to back up that theory.
First, DeBiase walked the room through the current state of ad spending in automotive, which has decreased dramatically since 2006, and is poised to drop even lower by year's end.
Ad spendIn 2006, dealers spent $8.25 million on ads, while the industry as a whole spent $26.46 million. In 2007, dealers spent $7.59 million, when the industry spent $24.36 million as a whole. And finally, in 2008, dealers cut their ad spend to $5.85 million when the industry cut its total budget to $20.9 million.
"This year we expect it to be way down," he said. "We're missing the boat as an industry. What most OEMs, dealer groups, and agencies ask us is to deal with questions" related to media types, and their inherent strengths and weaknesses.
In television, TNS has been working with Starcom and Comcast to determine how marketers can compete more effectively in a pull medium rather than the traditional pull. DeBiase argued that people have less and less time and/or patience for irrelevant advertising.
Meanwhile, data is becoming available that allows advertisers to find their true targets, he said.
Marketing objectivesIn its research, TNS found that efficiency was up 56 percent, and effectiveness was up 38 percent as it related to brands' use of interactive ads on two prominent cable providers. DeBiase added that the data was taken from numerous industries, not just automotive, but he believes it rings true across the board.
The firms found that viewers who were exposed to interactive ads were less likely to tune away when it was well targeted. For example, when General Motors' ads were delivered to marketers' true targets, efficiency and effectiveness both climbed, he added.
The online space is more difficult to maneuver in because of crowding and its rapidly changing complexities. In a study with J.D. Power & Associates, Compete dug into very deep level data to determine where advertising is most efficient.
The less targeted niche sites like Facebook, Yahoo, Google, and MSN are much worse for marketers' needs, DeBiase said, citing the research, and they do very little for ROI.
In the online portal space, most brands want to be on Google, Yahoo, and MSN, but AOL was a much better destination for brands to reach new vehicle buyers a year ago.
Social mediaFor all the talk about social networks and their marketing potential, TNS presented some data that might cause some social media gurus to frown. The bulk of automotive-related discussions, 88 percent, are occurring on message boards, DeBiase said. Blogs capture 10 percent of the discussion, social networking sites and user groups come in at 1 percent each, while Twitter holds a small 0.35 percent, he added.
"It's all happening on message boards," which existed before most of us could even spell internet, he said. Lesser-known blogs like Luxist, Badling, and ParentDish are having more influe[...]
How automotive can survive the perfect storm
Few would likely jump at the idea of presenting a keynote addressing the potential for growth in the auto industry these days, but Sonic Automotive's VP of retail strategy, Rachel Richards, did just that to kick of iMedia's Driving Interactive in Huntington Beach, Calif.
"You're probably saying, 'Are you kidding me? There's no growth in automotive,'" she began.
Sonic Automotive, which was founded in 1997, earns $8.3 billion in annual revenue at 164 dealer franchises. It is No. 298 among the Fortune 500, and 60 of its dealerships are in Texas and California, Richards said.
The company undertook a strategy shift in 1999 that moved it from a 26 percent mix in luxury dealerships to 46 percent of all locations today. On the domestic front, the bulk of its mix is tied to GM products, which has Sonic quite concerned, considering GM's volatility of late.
Still, Sonic is convinced that its mix of profit-generating divisions will help ride it through the recession.
"We can survive in times of downturn if you focus on the other profit centers," Richards said. "Consumers, advertisers think of dealers as one profit center. We have four diverse profit centers, and those profit centers are new vehicles, used vehicles, finance and insurance, and fixed operations."
Fixed operations comprise 62 percent of the company's gross profit, yet it represents just 17 percent of total revenue. Part of that success comes through because Sonic focuses on brand and geography diversity, inventory management, and centralized expense controls.
"The key is the execution of taking those processes and standardizing them across the business model," Richards said.
There's no denying the fact that the economic climate is impacting every facet of business these days, and the automotive industry is getting hit particularly hard.
"I would say we have some concerns… This is a perfect storm," Richards said. "We have struggled in Sonic with maturing debt. They have it due in the coming weeks. When you're maturing debt when credit markets are closed, you're in trouble."
Making matters worse, consumer retail lending has tightened dramatically as well.
"So, does anyone think there's growth in automotive?" she asked. "Let's talk about the positive perspective. In 2007, the driving population was 241 million. By the end of 2009, it will rise to 246 million. So from our perspective, there's a pent up demand."
Sonic has been especially strong in the used vehicles segment, where sales were up 10 percent in a down industry.
"The used vehicle pie is actually getting larger," Richards said. "We do believe there's growth in automotive because we're not just new vehicles."
The question Sonic and countless others are faced with is how to communicate best with consumers to keep them engaged.
Richards made a strong case for sharing creative material across all businesses involved, for starters.
"A retail message from today's day and age rarely should be about brands," she said. "Every dealership should have a differentiation story. We at Sonic are getting better at that."
She said the retail automotive industry is much better at understanding customers' needs, communicating better with them, and finally, driving traffic to stores.
As such, Richards went out on a proverbial limb and argued against dealerships' use of social media. She told the audience she doesn't see the importance in being in that medium yet.
"When you only have a certain amount of time, dollars, and resources, you have to pick and choose," she said. "Consumer-generated feedback is not an area where customers are shopping."
She added that she believes automotive-relevant shopping sites are a much better use of dealership's resources and investment. Sonic is heavily invested in sites like Cars.com and Auto Trader.
Just because Sonic isn't sold on the importance of social media doesn't mean it's not doubling down on its digital spend. Sonic is reining in about 20 percent of its total spend and allocating all of that to boost what it's already doing tod[...]
Can the right online strategies rescue Detroit?
To prescribe a marketing cure for the auto industry's current woes at all -- let alone in a short article like this one -- would like be like providing cold medicine to someone whose stuffy nose is caused by a systemic, life-threatening disease. So, the key here is not so much to put forth a magic cure or two but to address some of the root causes of the current domestic auto situation head-on, combined with information that all of us in the interactive space can use to help Detroit be more efficient in reaching the right consumers at the right time, and to drive efficiency and results for an industry that is very important to the future of our country.
Save the date! To put more power behind your automotive marketing campaign, attend iMedia's Driving Interactive Summit. April 27-28 in Huntington Beach, Calif. Request an invitation to Driving Interactive.
Causes, challenges and factsThere are entire books devoted to the full explanation of how we got here, but knowing the basics is important if you're going to have a conversation with someone deeply involved in the industry. Following is a quick summary of the challenges we're facing:
Cost per vehicle must be competitive. The bottom line is that the factories operated by the Big 3 are just as efficient (in most cases) as the competition, but the because of a host of factors, the full scope of costs required to design, manufacture, and market, and distribute a Big 3 vehicle is $1,500 - $2,500 more than import brands. This isn't sustainable.
It is now a fully global auto industry. Camrys and Accords are made in the U.S. while the Ford Fusion is made in Mexico (made = final point of assembly). This is OK, but “Buy American” can now be used by imports as much -- or more in some cases -- as the traditional domestics.
The competition is only going to get tougher. Toyota and Honda were just the first wave of competition. Hyundai and Kia both posted year-over-year U.S. sales gains in January -- two of the only three manufacturers to do so. Korea is here in a big way and China and India are next, so being competitive with first-wave rivals isn't enough anymore.
Many Big 3 vehicles are already as good as anything offered from Europe or Asia. It's easy to remember the last 30 years and say "if they only built products people wanted." Those products that people want are here in many cases. The new Dodge Ram, Pontiac G8, Cadillac CTS, Chevy Malibu, and Ford Fusion Hybrid are all world-class vehicles that deserve to be bought, not just considered, by Americans now. If you approach a conversation with the Big 3 as an attempt to secure marketing budget but think in the back of your mind that, in reality, the budget will be wasted, you are part of the problem, not the solution.
Ways to improve marketing The Big 3There are the popular things to say, and then there is reality. Working with Detroit requires knowing some hard facts and to make informed decisions to spend money only in the most efficient ways. This advice is not based on personal opinion but rather derived from basic math that most, if not all, automotive marketers would believe in soundly.Mass reach marketing tactics need to stop being used. It's not that TV should go away. A plan with 50, 75, or worse, 80 percent reach with 3x frequency needs to stop being the measure of success when evaluating a media plan. Feeling a knot in your stomach? Reading on might make it worse. According to the most recent data:
Among all licensed drivers in the U.S., only 29.9 percent will buy a vehicle (new or used) in a given year. This data is a few years old, meaning it's certainly much less now.
Within that pool, only 27.7 percent will buy a new car in the same year. This means that in an entire year, just over 8.3 percent of licensed drivers will purchase a new car.
Forget that those 8.3 percent then break down into compact cars, family sedans, crossovers, and so on. Let's be generous and say we should be targeting all 29.9 percent of the populat[...]
Thrifty tips for brand promotions
With the state of today's economy, it's arguable that no group in business feels the pinch quite like those in marketing. This rings even more true for those working with companies in the automotive space. With shrinking consumer spending, the competition for retaining and attracting new business is fierce. Yet with budgets that are also shrinking, it's a challenge to maintain status quo, let alone launch new campaigns.
So how can digital marketers, and especially those working with automotive companies, trim marketing budgets while still keeping brand initiatives going strong? The answer lies in leveraging what you have, developing smart vendor partnerships that can deliver maximum functionality with minimal dollars spent and exploring inexpensive or free marketing activities.
Finding the economiesLet's start with leveraging what you have. This is an attitudinal tactic that I first learned from my grandmother. A product of the Great Depression, she rinsed and reused paper towels several times before she threw them away. For her, finding ways to stretch a dollar by leveraging what she had was instinctual. While I'm not a proponent of such extreme measures, my point is that economies can be found if you open your mind and start looking.
As an example from the automotive space, vehicle manufacturers often have multiple brands and multiple brand managers. Every brand manager is tasked with presenting a brand in the best light and increasing revenue, meaning they continually want new campaigns, an updated website, etc. As a digital marketer, you can be the conduit between brands, keeping costs down by sharing innovations, technology and resources. If two brand managers want a microsite to promote "green" vehicles, use the same underlying technology and brand the consumer facing interface individually. Create once and use twice.
Another way to leverage what you have is by pushing your company or clients to test old assumptions and requirements. For example, years ago, I worked on the planning of a major software initiative that required off-line capability for end-users. That requirement came about because in the late '90s, our Novell network was configured unreliably and we had frequent network outages. A decade later, that problem was history, but the requirement lived on for years. That requirement, based on an old assumption, made the project more complex than it needed to be and, consequently, more expensive to execute.
Another great example of this, in the automotive space, comes from Axiom Advertising. Tasked with creating a website for a large dealer group in the Midwest, Axiom decided to write its own Vehicle Identification Number (VIN) decoder so they could post detailed vehicle descriptions. That lasted about a week. The firm quickly realized there were vehicle data experts who specialized in compiling and delivering vehicle data. By challenging the assumption that they had to create their own system, they saved development time and money. The extra funds realized could be used for marketing, not IT development.
Testing assumptions can come in multiple forms. Test your ideas about in-sourcing versus outsourcing activities. Test your ideas about consolidating providers versus shopping for best of breed. Simply put, by testing old assumptions and requirements, you may open up more cost effective solutions and therefore more marketing dollars.
Teaming upThe last point segues nicely into our second suggestion for trimming budgets while still maintaining strong brand promotion: developing smart vendor partnerships that can deliver maximum functionality with minimal dollars spent.
Digital marketers are tasked with creating entire initiatives, from structuring and implementing the base technology to designing, writing and activating the end campaign. Many agencies and digital marketers don't pause to consider that what they need to build may already exist. [...]
Eco-friendly campaigns that excel
The price of fuel continues to climb, hitting record highs along the way. Everyone from airlines to movie studios, banks, bands and, of course, consumers are choosing to go carbon neutral in an effort to reduce their toll on our environment. Everywhere we look someone is touting the benefits of "going green." And nowhere is this more evident than in the automotive industry's marketing campaigns.
Their efforts are spurred by record low U.S. car sales across manufacturers. According to figures from Autodata Corp., July 2008 marked the worst month for sales in 16 years, and although August proved slightly more encouraging, sales were still more than 15 percent lower than the previous year. Research from TNS Media Intelligence, which tracks advertising spending, shows a shift in ad spending among auto manufacturers toward their smaller and more fuel-efficient vehicles and away from trucks and SUVs.
Is a green-themed car campaign enough to turn things around? Some are betting it is by investing in clever and elaborate online marketing initiatives designed to educate, entertain and ultimately lure consumers back to the dealership.
MINI creates CarFunWhen it launched in August, MINI Cooper's CarFun Footprint microsite became an instant viral hit. It had all the trappings of an impactful campaign: an intuitive interactive tool, humor and a clever play on the trendy term "carbon footprint."
At the site, users are asked to select their make, model and color of car to calculate their "Fun Score," based on survey data from consumer research firm Strategic Vision, and "Green Score," which is sourced from the Environmental Protection Agency's Green Vehicle Guide. Together, the scores represent one's CarFun Footprint, and prompt a post-quiz response this like one: "You're driving a nice, comfortable sedan. Nice. Comfortable. And not particularly exciting. You could be driving a 37 mile per gallon MINI Cooper that takes nice and comfortable and adds the excitement of go-cart handling, starting at just $19,200."
Prior to launching its campaign, MINI had already benefited from the halo effect of consumers' concerns about rising gas prices. (Autodata reports sales rose by more than 30 percent this year through July.) Its CarFun Footprint campaign, which includes print and outdoor advertising, further spotlights the brand's climate- (and wallet)-friendly design. It also puts the brand head-to-head with its competitors in an environment where the original small luxury vehicle is bound to come out ahead. Existing MINI drivers are sure to find validation in this playful initiative, while consumers interested in living greener (and having more fun in the process) can't help but ponder a buy.
Traversing our reliance on the pump This summer, GM launched a collection of ecologically minded ads for its Chevy brand during the 2008 Beijing Olympics to underscore its more fuel-efficient vehicles. Among them were new ads for the company's existing "Gas Pumps Hate Us" series, where gas pumps were seen vandalizing cars in their frustration over not being needed. Also introduced were spots marking the upcoming launch of the Chevy Traverse, an eight-passenger SUV with impressive (relatively speaking) highway fuel economy.
Online, the campaign manifested itself with homepage takeovers and display ads. A new Traverse microsite makes the company's brand objective clear by featuring a background of silhouetted trees, and a section on the vehicle's fuel efficiency that pits the Traverse against its competitors.
Both campaign themes feed off consumers' common aggravation over the high price of fuel and endeavor to address their concerns, but in different ways. "Gas Pumps Hate Us" uses humor by personifying the pumps and creating an adversarial relationship between them and the driver not unlike that which we've all experienced -- albeit it in less tangibly aggressive way. The Traverse ads serve to addr[...]
BT only tells half the story
You're at the grocery store and as you finish checking out, you walk by the magazine rack. Odd, why not put it before the checkout counter? According to many marketers today, you're not guaranteed to be a shopper until you demonstrate a true shopping behavior. Sure, you put stuff in your cart earlier on, but you could've put it all back. We need to see you're serious about spending money!
There are all sorts of new-fangled purchase funnels. The reality is that while consumers have altered their behavior to accommodate using new media, there are still basic pillars and mental checkpoints that occur within the purchase process. A consumer must be aware of a product, consider buying that product, intend to buy that product and then buy that product. Unfortunately, retailers have recently moved toward a model where "awareness" and "purchase" are the only two stages that get attention. Forget the middle, we don't have time! That's like drinking the last drop of a milkshake and demanding a bigger straw be built rather than realizing it's time to go make more milkshakes. It's a long, expensive route to build a bigger straw to just get one more drop of milkshake when the same expense could be used to make a completely new glassful -- and be sipped with the same straw. Note to straw manufacturers, BT is not your thing.
One of the verticals in which this is most commonly demonstrated is automotive, where there used to be three "tiers." Heart, head, wallet. Tier I, or the OEM made the consumer fall in love with the product. Tier II, or the regional dealer associations educated the consumer on the features and the benefits and Tier III, or the local dealer, told the consumer to "buy here, buy now!" Now, the media is bought as either "brand" or "in-market." So, lots of awareness spending is done at Tier I, while Tiers II and III exclusively go after active car shoppers using tactics like BT or third-party auto sites. It's also a creative issue, where "wallet" has taken over Tiers II and III. This leaves the majority of car shoppers knowing there are really great deals -- on cars they don't necessarily care about. BT has its place and absolutely should be part of marketers' plans. It's just not everything. So, what should marketers do?
Reinstate a real mid-funnel media planCrashing your high-school girlfriend's wedding and holding up a 300x250 banner from the audience as she walks down the aisle (walking down the aisle is an in-market marrying behavior, marketers would say) is not the way to persuade her to marry you instead of the guy at the altar. It's not the way to get a car shopper either. Being there in the consideration process before the big event is key!
On the flip side, only 28 percent of all cars sold each year are new cars. So, hitting 85 percent of the online population at the mid-funnel is unnecessary. Hitting 30-40 percent (it's never perfect), making sure those are likely new car buyers at some point is probably a much better strategy.
Know who likely buyers at some point areSince someone who is likely a future car buyer has not demonstrated any shopping actions yet, automotive BT won't necessarily work. Demographics alone are too broad. Psychographic statements are only reliable if matched with panel responses, which are small samples to begin with. What is reliable, though, is knowing where these likely shoppers hang out online. New(er, anyway) services from folks like Compete, Quantcast and Hitwise enable marketers to see into current shoppers' clickstreams to understand the lifestyle patterns of these shoppers online. (Full disclosure, Beep! Automotive is operated by Goodway Group, and is partnered with Compete for data purposes.)
Look beyond on-site buying-oriented actionsFor buy here/buy now advertising, measuring these actions is great. But JD Power's 2007 autoshopper.com study shows that automotive internet users who visit an OEM first, rath[...]
Cloud computing and cars: a web services primer
Web services are not a new invention, but only recently have we seen them gaining acceptance in many industries, including automotive. If you consider the nature of a vehicle, combined with the exploding number of consumers heading online to research and shop for vehicles, this makes sense. Because a vehicle can have over 10,000 options and pricing configurations, ensuring that an automotive selling site has the most up-to-date and accurate information, and that it has the tools that consumers demand (such as allowing consumers to build their own cars by adding options, colors, etc., and then comparing them to other models) is a monumental job. Enter web services.
What web services can doBefore we delve deeper into how web services can benefit a wide range of industries, let's step back and explain more concretely what they are and what they do. Web services are interfaces that exchange information between an application and a remote data source. They allow software applications to access and use functionality and data created by another provider, or multiple providers. This is an abstract concept, so let's make it tangible with an example of web services, courtesy of the website XML.com: a music CD.
If you want to play a CD, you put it into a CD player and the player plays it for you. The CD player offers a CD playing service. You can replace one CD with another, or take your CDs to a friend's house and play them on their player. No matter what music is on the CD or what player you use, you can listen to it because the systems talk to each other. This works the same way as web services do. Without web services, every CD would come with its own player and the two would not be separated. This sounds odd, but it's the way many software systems have been built. In effect, building a software system has been like re-inventing the wheel every time, with all the development time and costs that includes.
With that basic definition, let's circle back to how industries are using web services, and why they would want to. Let's take Google as an example. Google has popularized web service utilities for businesses and for the general public. Groups ranging from non-profit organizations to book clubs use their Google Groups and Google Docs to share information and stay in touch. Another example is cdyne, which applies web services to a specific domain or demographic. Their demographics web service delivers enhanced census data, which their clients use to target customers or neighborhoods for their own services and products. Web services for automotiveIn the automotive industry, this same concept is applied to a vertical market. Online vehicle shoppers want quick and easy access to the most up-to-date and detailed vehicle data. A vehicle manufacturer or portal site could re-invent the wheel by developing its own configuration and comparison tool to combine raw data with available options, but the creation is time-consuming and requires sophisticated programming skills and constant data updates.
Using web services, they create a simple consumer-facing interface and flow data through it from a data provider. They don't have to create an infrastructure or manage data updates; the provider takes care of that. Every interface is customized for look and feel so every website retains individuality. Check out Vehix.com and Sam's Club Auto Buying Program for examples. Both use web services to deliver vehicle data, but each interface is customized and unique. And neither company has to worry about updating the data or keeping the service running; the web service provider takes care of that. They've increased their capability without having to invest in a new infrastructure, derail their development team or invest in new personnel.
Why they workTo continue with the "why" of web services, reduced cost[...]
Online video: who is leading by example?
It is clear in 2008 that we have moved far away from the age-old formula of advertising where interstitials were king (pre-, mid- and surround-roll). People aren't watching video online like they do at home in front of their 65-inch plasma; they decide where and when they want to view content.
The time has come to stop focusing on "avails" in media but rather on those small segments of "avails" in consumers' daily lives. Video strategy and planning is at a new height as we move toward complete consumer empowerment through interactivity.
The big questions this year are: where exactly is all the online video content coming from, and who is producing it? And, concurrently, what are the best ad products available today?
Video productionThere is a new generation of content producers taking control of video creativity in our industry: interactive agencies, web publishers and consumers. Digitas and AKQA recently announced new divisions dedicated to helping clients leverage new and emerging opportunities to create and distribute media content. Mark Beeching, Digitas' global chief creative officer, said, "As traditional production and distribution hierarchies erode, video is set to explode into exciting new ways of reaching audiences… this explosion opens up infinite new possibilities for brands to play."
On the publisher front, Jumpstart Automotive Media launched its Labs group in late 2007 to support clients and publishers with creative strategy, syndication and new product innovation (including film and video production). Labs will utilize internal and partner-company resources to produce unique and relevant video content on behalf of OEM, regional and mega dealer clients.
And then there is the ever growing world of users generating and sharing video. EyeSpot CEO Jim Kaskade said, "Consumers want to make content their own. The publishers who make that possible will come out on top in 2008." Eyespot is one of those companies making user-generated video easier for both publishers and consumers by helping with uploading, editing and sharing. Users encountering Eyespot's technology on a publisher's site can drag-and-drop video clips, mix and match rights-cleared content with user-generated content, and send content to their friends online or via mobile.
In regards to automotive, here's an example of a local dealer utilizing EyeSpot for content as advertising:
Video advertising Video advertising online continues to evolve as fast as the production of it, ultimately enhancing the user experience with brands both inside and out of the video. With this quick-changing evolution comes a lack of video standards but a ton of innovation and new thinking!
Delmond Newton, chief executive officer of Fever Beverage USA, recently discovered that sales of his new energy drink skyrocketed with a mere mention in a music video featuring rapper Ludacris. Rather than spending money on TV commercials and other traditional advertising vehicles, he's discovered the power of content integration with the help from a company called NextMedium.
NextMedium is hoping to standardize the product-placement marketplace. Playing matchmaker of sorts, the company has created Embed, where advertisers can find shows, music videos and movies on which to appear, and producers can find advertisers willing to pay for placement. Brands can search the marketplace for opportunities by keyword, demographic or even experiences for desired communications. Analytics then help show the value of each opportunity and historical brand integration performance. NextMedium CEO David Bluhm said, "making product placement more efficient and available to smaller advertisers could help TV networks offset the shift of advertising dollars to the internet."
Outside of the content development question, the use of video advertising as the standard c[...]
Why plain old relevance won't get you the sale
Fewer than 20 percent of automotive ad impressions are generating 80 percent of the impact on decisions about which vehicle to buy. Within this 20 percent, the most influential advertising is on automotive websites, and the reason is timed relevance. These seem like bold claims, I'm sure, but I can back them up, and they reveal some important truths about how we target potential automotive customers.
Although the 80/20 principle -- 80 percent of the consequences come from 20 percent of the causes -- is widely accepted in many areas of business, advertisers generally give all forms of advertising frequency equal weight. The reason for this is pretty simple: it is difficult to know which ad impressions were delivered to just the right people at just the right time with just the right message. So while identifying which 20 percent of the customers are responsible for 80 percent of the profit is commonplace, measuring individual ad impressions is a lot tougher.
While some shoppers refuse to give credit to advertising at all for having influenced a decision, in the 2007 New Auto Shopper study by J.D. Power and Associates, 54 percent of all new-vehicle buyers openly declared that the internet affected their make/model decisions. Even more telling, fully 25 percent of all buyers said the internet had a "big impact" on which vehicle they purchased -- this number includes those buyers who do not have internet access and therefore couldn't possibly have been influenced by its ads.
So it seems that even though the internet is a powerful force for driving automotive purchases, the industry is still only dedicating a small percentage of overall ad spending to the digital channel. Some of online's sphere of influence can be attributed to manufacturer and dealer websites. Indeed, it has been well established that even when a shopper starts at a site like Toyota.com, he or she frequently buys something other than a Toyota. Manufacturer sites are essential to manufacturers (just as dealer sites are essential to dealers); yet, there are no conquest opportunities on these sites (some large dealer group sites being the exception). So how are so many new-vehicle buyers being influenced by the internet?
"When" relevance and reachMillions of shoppers come to independent automotive websites for credible information, comparisons and advice on what to buy. The key point is that they are openly asking to have their thoughts and opinions influenced while visiting these sites. This is the importance of "when" relevance, and is an area where online has the highest potential to influence people – right when they are thinking about the very need your product addresses.
The concept of "when" relevance, or the importance of timing in behavioral influence, is far from new. In his book, "Predictably Irrational," MIT behavioral economist Dan Ariely comes to the conclusion that a key method of keeping ourselves from making the same irrational mistakes repeatedly is to develop systems that interrupt us at precisely the time we are going to make a decision one way with information that will shift us back in the right direction.
The value of "when"Effective cost-per-thousand (eCPM) is usually defined as the cost per ads delivered (vs. booked or guaranteed). True eCPM measures the value of a media purchase with respect to "who" relevance -- how efficiently we are reaching the right people. For an advertiser to calculate comparable eCPMs, it should also include an additional element in the calculation -- the proportion of the impressions that reach actual car buyers.
Behavioral targeting (BT) can give advertisers more frequency with the right "who" relevance, allowing them to reach people who are probably in the market for a vehicle over the next few weeks or months. While this is a huge leap forward, BT typical[...]
Key innovations from the world of auto marketing
As you would expect, today's biggest trends in the automotive industry all revolve around e-commerce. As more consumers head online to research and shop for vehicles, vehicle sellers and marketers have to provide the websites, electronic tools and online information consumers want and need.
Yet, they are also challenged to attract and retain in-market auto shoppers to their online turf, especially during a weak – and therefore highly competitive – economy. This calls for innovation in areas such as campaigns, eye-catching visuals and clever SEO tactics. Following are five of the big marketing trends we're seeing in the automotive industry and how they're affecting and changing the online environment overall.
Mobile marketingAlthough mobile marketing has been popular for a while, it's only recently that companies in the automotive space have started to optimize this communication channel.
Take a look at the work of some companies currently employing this technology. Dealership e-newsletter service IMN Loyalty Driver has started including mobile coupons in its publications. When customers receive an e-newsletter that includes a coupon, they enter their cell phone number into the space provided and within seconds the coupon is delivered to their phone as a text message. To redeem the coupon, customers only have to show their phone at the dealership.
Mobile marketing company Gumiyo makes it possible for a dealer to place trackable keywords, VINs or stock numbers next to vehicle advertisements (both print and online) that consumers can text from their cell phones. These buyer-generated text messages receive automatic dealer replies with specific vehicle information, or promotions with links that launch a cell phone's web browser. Services like this make a dealer's inventory directly available to cell phones, potentially shortening the sales cycle and increasing the value of offline advertising.
Innovative uses of videoFull-motion vehicle videos are steadily gaining in popularity. We've seen many dealerships and portal sites licensing video content because it delivers compelling presentations that keep viewers on sites longer which, in turn, raises conversion rates. In response to the overall success of video-based ads in the automotive market, vendors are starting to experiment with video in unique and innovative ways. The Wall Street Journal online for example, is now using a video component to supplement many of their articles and special features, including those about the automotive industry.
Another great example of this is MyDealerBroadcast. The company is working with dealerships to deliver automated, personalized email messages in response to customer vehicle inquiries. Each message includes an embedded photo along with a link to a vehicle video. Once an email is sent, the dealership sales team receives instant text and email alerts whenever the customer interacts with the message, so they know what leads are hot and when to follow-up. Not only does their product guarantee that a customer vehicle inquiry will be answered promptly, the inclusion of video gives the customer immediate access to the information they want in an eye-catching presentation that grabs attention and better primes them for the sales call.
Web servicesThe automotive industry is data-heavy: With numerous new vehicles released every year, each with more than 10,000 option and pricing configurations, a dealer or portal trying to get complete vehicle information online and provide configuration and comparison services has a steep development hill to climb. Because of this, web services are rapidly gaining in popularity.
Web services allow companies to focus on core competency – how the application manipulates and enhances data for the best consume[...]
Create an agency out of chaos
Out of the ashes rises the phoenix.
That's what came to my mind when listening to Paul Ratzky, engagement planning director for Team One/Saatchi, moderate a panel discussion on the new agency model in automotive marketing at iMedia's Driving Interactive.
"Among chaos, the traditional agency model is blowing up," he said. "But we're not sure yet what the new model will be."
There is no question that with media channels and communications no longer separate and disjointed, agencies can't afford to be remain siloed. Plus, the powerful emergence of user-generated content and social networks means marketers must now talk with customers in new ways, which involves all communication disciplines -- digital and traditional marketing applications, PR, customer service, etc.
So what's an agency to do?
Bethany R. Mach, SVP, director of digital communications investment planning for Mindshare, offers one solution: Team Detroit.
Team Detroit is the official name of the recently formed joint venture comprised of WPP's Detroit-based agencies, including JWT, Y&R, Wunderman, Ogilvy, and Group M media companies Mediaedge and Mindshare.
According to published reports, the WPP agencies restructured their service offerings in Detroit to provide best-in-class talent, easy access and more effective marketing partnerships to its client base in Detroit, the largest of which is Ford Motor Company. Under one roof, but on separate floors, is a consultative group, a content creation unit, an exchange group and a client services team.
"The whole point of Team Detroit is that you have six agencies under one umbrella, each of which still has its core competencies, but all of which work together for the greater good," Mach said. "The world of traditional can't stand that type of pressure -- we have to start looking at alternative ways."
The biggest challenge to creating these alternative ways, according to the panel, is a talent shortage.
"There are lots of talented people in traditional, but whether they have the skill set to transition is questionable and a problem at this point," said Gregory Johns, associate interactive media director for PHD.
But it's not just about training traditional people in the ways of digital. Those who have cut their teeth in new media need educating as well as seamless integration. All disciplines need to speak the same language and understand not just the technology or the media channels in which they dabble, but the fundamentals of marketing as well.
Johns suggested rotating people through various job functions to broaden expertise across the board. Mach said there are many people at Team Detroit who have switched places from traditional to digital and vice versa.
Such cross training could result in an industry of generalists, Ratzky said. "Is that necessarily a good thing, or do we still need specialists?" he asked the other panelists.
He got a resounding "sort of" response. Everyone does need to be a generalist, the group agreed, but an agency also needs to build expertise within its ranks.
For example, Fred Sattler, EVP, managing director for Initiative+, said that although a media agency wouldn't do creative work, it should develop an asset management strategy so its planners know if there are videos that can be re-cut, etc. And Johns said he felt that an agency should have search expertise because all media will one day be bought this way.
"An agency shouldn't bite off more than it can chew," Sattler said. "If you don't have the skills, don't fake it."
The difficult part in all of this is determining who takes on what roles as agencies become less siloed and as new channels emerge and evolve. Take social media, for example. Who should be the one figuring out how to infiltrate MyS[...]
The key to holistic marketing
One of the many interesting things about working at a third-party automotive website (in my case, Kelley Blue Book's kbb.com) is that I always hear stories about the car-buying process from my friends. While there is more information available to consumers about cars now than ever before, there is still a lingering uncertainty in people throughout the whole car-buying experience.
Even more interesting is that I'm often asked to give feedback about a particular model, or to accompany someone to a new-car showroom, to aid in the car-shopping process. Even after all of the research that shoppers do prior to purchasing a new vehicle, there still seems to be a need for them to be further "comforted" during the actual process. This presents a true opportunity for auto marketers to expand their efforts in reaching new-vehicle shoppers.
Save the date! To put more power behind your automotive marketing campaign, attend iMedia’s Driving Interactive Summit. April 28-29. Request an invitation to Driving Interactive.
There are a number of platforms in the shopping process where auto marketers can help comfort and inform shoppers:
Via text messaging
Through a social network
One of the real automotive marketing innovators in these types of efforts is Mazda. The auto manufacturer has been a leader in providing multiple tools to consumers to aid them in their shopping process.
Rudy Privitelli, group manager of digital marketing for Mazda North American Operations, says, "We take great pride in leading in this space to ensure we maintain every advantage we can in this competitive environment. For example, we provide options like the Mazda Shopping Assistant (MSA). This online chat feature allows our Mazda site browsers to connect with a Mazda employee to assist them with their needs while online. The MSA agent can also answer questions concerning current incentives, products, financing options and assist in getting a selling price for a specific vehicle from their local Mazda dealer."
The ability for a car shopper to ask questions directly to a manufacturer via its website is something that both comforts and benefits the consumer. This feature already is being used in other non-automotive sites, and it would be a great addition to both manufacturer and third-party auto sites as an aid to car shoppers.
Many opportunities exist to use social networks to help consumers shopping for cars. For example, Facebook now has some auto companies setting up a profile and allowing Facebook users to become fans. This is great for current owners and prospective buyers to read comments and get information about a particular manufacturer, and it is another way for shoppers to feel comforted during the shopping process.
Mobile applications also are being used to help the shopper during the buying process. According to Mazda's Privitelli, "MazdaUSA.com is completely mobile and we continue to add features like SMS that allows consumers to receive text messages of driving directions to Mazda dealerships, and we will soon enable quote requests over the same application. Imagine sending a quote request while at lunch, communicating with the Mazda dealer in negotiating the deal, and completing the purchase before dinner -- all with your mobile device."
With all the numerous platforms available to auto marketers, it is still important to remember that each of these platforms has different characteristics that need to be used to garner results each in their individual ways.
Paul Ratzky, director of strategic integration for Team One Advertising, says, "A key point auto marketers need to keep in mind is that each platform is unique, and serves a very specific purpose for its users. The old[...]
Google's view of autos for 2008
Jodi Harris: It's been over a year since you joined Google as the automotive vertical market director. From your perspective, have there been any big changes to the category or to Google's automotive strategy, since then?
Bonita Stewart is director of the automotive vertical category at Google. Read full bio.
Bonita Stewart: We've seen major changes within the industry, such as soaring fuel prices, sales declines, market share fluctuations and reduced production; however, our automotive strategy remains the same. We work with our clients to demonstrate how technology, especially during turbulent times, aids ROI-driven media solutions.
Harris: Green marketing and reducing oil consumption seem to be major focal points for the coming year, and the rise in mobile technology and niche social marketing indicate that that localization will become a key marketing touchpoint for conveying brands' positions. What thoughts or best practice recommendations can you share to help automotive marketers strategize for these big issues in 2008?
Stewart: First, automotive marketers should implement localization on two levels -- brand and dealer. Brand marketers have the unique opportunity today to deliver relevant messages to their precise target, whether it's a potential hybrid customer or someone interested in fuel economy, through contextual targeting. Meanwhile, dealers have the opportunity to geographically target their products and services, and mobile technology offers the ability to connect with a dealer during the shopping process.
Harris: Focusing in on the idea of precision targeting, what strategies do you feel work best for brands to identify and target the right niches associated with their nameplates?
Stewart: Most brand marketers have defined targets, but it's critical to identify and then optimize their niche targets throughout the campaign, since some may have a higher ROI than others. We suggest placement targeting and taking advantage of niche sites to complement your brand strategy. If auto sales are expected to slow, it's critical to mine for potential consumers by targeting relevant content on niche sites. More than 76 percent of page views are in niche sites. (Source: AdRelevance)
Harris: Are there other key marketing trends do you anticipate will play a big role for automotive in 2008?
Stewart: Right now we are particularly keen on the benefits of online video. It's the new portable TV and offers the sight, sound and motion automotive marketers crave to differentiate their product and to evoke consumer emotion. In November 2007, U.S. consumers viewed more than 225 million auto/vehicle videos on YouTube. And several auto marketers have used online video to successfully launch new vehicles during the LA and Detroit auto shows, achieving views between 400,000 and 950,000 in a single day.
Harris: Video strategy also seems to be a top priority for the automotive market because so much of the purchase process involves getting a deeper feel for the car than just looking at pictures. Are there upcoming trends you see for video search and its ability to meet more tech-savvy consumers' needs?
Stewart: Assuming they have the appropriate digital rights we encourage all of our clients to upload their video content. Google's resources and expertise make YouTube's search experience the best it can possibly be. Recommendations, related videos, active sharing and subscriptions are very popular ways for people to find meaningful automotive-related videos. We will continue to make search and discovery of videos a priority in 2008.
Harris: Recently, you mentioned the concept of "atomization" in campaign distribution. What sug[...]
Why GM gambled $1.5B on digital
When the third largest advertiser in the U.S. so much as sneezes, Madison Avenue is ready with a tissue. But the recent decision by General Motors to shift one half of its total advertising budget to digital over the next three years is hardly a sniffle. True, GM already leads the way among auto manufacturers, according to comScore, which reports that the carmaker delivers 27 percent more display ads than rival Toyota. But GM's decision to split the difference between digital and traditional has many of the web's big players thinking that we could be in the middle of a seismic shift.
"GM's decision to allocate 50 percent of its media budget to digital shows its commitment to more closely aligning media consumption with media spending," says Mitch Lowe, CEO and founder of Jumpstart Automotive Media. "Their head start will give them a distinct competitive advantage."
But if GM does realize an advantage from its digital about-face, it won't be because its competitors are asleep at the wheel. The same comScore numbers that put GM ahead of Toyota with respect to display ads served also credited the Japanese carmaker with greater efficiency compared to the rest of the field. Toyota serves 32 percent more ads per person reached than all other auto manufacturers.
Save the date! To put more power behind your automotive marketing campaign, attend iMedia’s Driving Interactive Summit. April 28-29. Request an invitation to Driving Interactive.
Add to Toyota's impressive numbers its willingness to experiment -- the company recently spent $4 million on a dedicated YouTube comedy channel -- and it's clear that the GM marketing team has its work cut out for it.
But according to Shawn Riegsecker, CEO of Centro, GM will have one big advantage over the rest of the field.
"It will be the first time any client will have the budget and presence to look on the internet as a clean palette with which they can do anything," Riegsecker says. "Most brands are under-spending on the web, which limits their ability to truly be creative and use the medium for its potential. GM won't have these constraints and, pending similar moves by other advertisers, I expect GM to lead the revolution and gain first-mover advantage."
Drive carefullyNo matter how you slice it, GM's decision to dedicate half its ad budget to interactive is a good thing for anyone who works in digital. But GM might not be the ideal big brand to take the digital plunge the industry has been waiting for.
While Riegsecker and Lowe praise GM's marketing team, both acknowledge that marketing can only go as far as the product lets it. Both had praise for GM's products, but that message doesn't seem to have reached American consumers, who have made shunning the automaker something of a generational pastime.
"GM's sales and labor relations have faced a great deal of scrutiny in the past generation, and they have lost market share due to these and other factors," Riegsecker explains. "But their marketing has remained rock solid. I doubt so many analysts would fault GM's marketing for the company's loss of share."
According to Lowe, GM needs both great products and smart marketing to succeed. But, he points out, digital may be the place to reduce costs and improve efficiency in terms of delivering the right marketing message to the right customer.
"GM has put exhaustive research behind digital media investing and this shift proves its success," Lowe says. "With digital media, it is possible to find all consumers who are in-market shopping for a car and to narrowly target the right sales message to these consumers. This shift will result in GM selling more cars for a lower o[...]
Analyzing beyond the leads
Any company that relies on leads knows that lead quality can vary greatly depending on a number of factors. Lead source -- banners, paid search, email -- in particular can have a tremendous impact on the quality of the lead.
What if you could see not only how effective your external campaigns were at driving leads, but also how effective they were at driving qualified leads that turn into sales? Or, even better, just how good they were at driving revenue?
The technology now exists to allow for such analysis.
Let's look at the automotive category, which has been particularly bullish on analyzing campaign effectiveness beyond the lead.
Save the date! To put more power behind your automotive marketing campaign, attend iMedia's Driving Interactive Summit April 28-29. Request an invitation to Driving Interactive.
Automotive sites regularly look at web analytics data to discover ways to optimize pages, processes and applications in order to improve the online business. While various metrics are used as key performance indicators, lead submissions are by far the most watched and coveted metric.
Leads show a significant level of interest by the user. But you can't assume that just because a campaign is driving plenty of leads, it's a successful campaign. One campaign may drive fewer leads but more orders, while another campaign may bring in a great number of leads, but less actual revenue. So how can a company track a lead after it has been submitted to the site? Consider these basic steps:
Step 1. Tag each lead. At the heart of this solution is what my team calls a "lead ID." The lead ID is generated by the site for each lead that is submitted. Those leads, complete with ID, are then loaded into a web analytics system.
Once that is done, other metrics can be tied back to the individual leads.
Step 2. Decide what key performance indicators (KPIs) to track beyond the lead, and gather offline data. The second step is to decide what KPIs you want to track in addition to leads. At the least, you'll want to track number of orders placed by the leads, and the revenue generated by the leads.
The auto industry has also been keen on tracking just how quickly a lead responded to an offer. Leads that respond within a few hours tend to have a vastly higher conversion rate than those that responded after a day or more passed. Knowing which campaign results in leads that respond quickly can be vital.
We realize that for industries such as automotive or B2B, which generate leads online but sell offline, gathering offline data such as number of orders and revenue can be challenging.
If you're lucky, you already have systems in place to gather the data. If not, you might explore some best practices in the industry and begin gathering such data. For example, you might begin providing discount codes with each lead. When someone shopping for a car brings that discount code to the dealer, the code is linked to the lead ID they submitted on the site, and that can be tied back to the lead. Or you can simply use match-back data, where information submitted in a lead -- such as name and address -- and information submitted at the point of sale are matched back to each other.
Step 3. Import the offline data back into the system. This lets you see exactly how well your banner ads, search keywords, onsite offers and other promotions really did: Did the campaign with the most leads actually generate the most sales and revenue? Are some leads not pulling their weight when it comes to actual sales? Once you have this information, you can be more discerning in deciding how to allocate your marketing spend.
Powerful niches to park your ads in
A growing trend we saw in 2007 was niche or targeted marketing, and this trend seems primed to take off in a big way in 2008, especially in the automotive industry. Automotive dealers and vehicle portal selling sites are fighting for sales, and one way they've found to differentiate themselves from the crowd is to hone in on a niche market and then use advertising, innovative website design, search tools and comprehensive vehicle data to draw in consumers and turn them into loyal customers. This type of marketing can pay off in a big way, as advertising dollars are aimed at exactly those websites, social networks and organizations that cater to a target niche. Three major niche markets that we've seen stoking this trend, in the automotive industry and multiple others, are women, "green" or environmentally conscious consumers and alternative lifestyle advocates.
The first group, female consumers, makes up 51 percent of the population and wields enormous purchasing power, yet this group has often been poorly targeted outside of traditionally female markets. Not anymore. In the automotive industry, check out websites marketing to women like CarTango, the first female-focused matchmaking site that allows women to share information, and research and purchase vehicles in a no-pressure environment. Realizing that women often purchase vehicles for lifestyle reasons -- they have children so need extra room and superior safety ratings, need excellent gas mileage for a killer commute, etc. -- the site offers tools like the Car Soulmate Survey for the perfect match between vehicle and needs, and acts as a conduit between shoppers and dealers to relieve much of the anxiety of purchasing a vehicle.
In the financial industry, Suze Orman is rapidly emerging as the go-to source for women with personal finance and investing questions. An author, host of her own television show, magazine and online columnist and resident financial expert on "The Oprah Winfrey Show," she's found her niche, and her six best-selling books prove women are listening, and buying.
The explosion of green products, services and organizations in 2007 seems destined to increase in 2008. Al Gore may have brought the plight of the planet to the forefront with his "An Inconvenient Truth," but global consumers are making green thinking more than just a flash in the pan, and companies are taking note. It is worth noting that many companies are taking the lead in green buying, and many B2B marketers have been caught off guard by carbon concerns. From Greenshopper.com, an environmental superstore and online community of green shoppers, to EVO.com, the site to visit for everything from detailed hybrid vehicle information to home furnishings, environmentally conscious consumers have a wealth of information and products to explore.
Alternative lifestyle advocates are using the internet to put their dollars towards companies and services that support their interests. Gaywheels.com is an automotive resource that delivers information about gay-friendly automotive companies and facilitates commerce with gay-friendly companies throughout the entire vehicle buying process. The Gay Financial Network provides valuable financial and legal resources for the gay/lesbian/alternative lifestyle community including personal finance, investing, insurance, real estate and career advice.
With niche marketing on the rise, should you suggest it to your clients? There are many potential benefits and pay-offs from targeting your marketing, including better clickthrough rates, because content is narr[...]